Commercial banks are financial institutions that provide a range of banking services to individuals and businesses, including accepting deposits and making loans. In consumer, retail or personal banking, these banks provide individuals the opportunity to save money, make remittances, exchange foreign currency, access credit facilities and make personal investments.
Many commercial banks typically offer a number of term deposit accounts, including fixed deposit accounts, call deposit accounts and savings accounts. Since these accounts render varying levels of interest rates on deposits, customers have a greater incentive to regularly deposit money and earn interest. This promotes a saving culture among bank consumers, and it allows them to set money aside for emergencies and gradually save large amounts of money to purchase costly property, such as an automobile.
Through loan facilities offered by commercial banks, qualifying customers can access credit, which they can use to start a business or purchase personal property. For example, when a person wants to purchase a home but lacks the funds to buy it in cash, the best option would be to secure a mortgage loan, which is typically secured against the property. Without such a loan, many prospective homeowners would be unable to make this investment. Some commercial banks also provide personal investment consulting services, advising customers how to invest their money for greater return.
Commercial banks process various payment transactions initiated by customers. In essence, they provide a link between individuals and organizations. Whether you want to settle a utility bill, pay rent, pay an insurance premium or pay taxes to the Internal Revenue Service, you can rely on a commercial bank to process these transactions. These banks also allow customers to receive payments or money transfers to their accounts, and they provide debit cards, prepaid credit cards and regular credit cards, which account holders can use to access their money.
Exchanging Foreign Currency
When traveling abroad, you may want to convert your dollars into the country’s currency. Or a relative who lives overseas may mail you money in his local currency. You can ask a commercial bank to exchange the money into your preferred currency. These banks publish daily exchange rates for various currencies, thus informing consumers when it's the best time to exchange their money.